Donald Trump’s trade agenda faced its toughest challenge yet on Friday after a federal appeals court ruled that the former president exceeded his constitutional authority when he imposed broad tariffs on nearly every country in the world.
The Washington DC court, in a 7–4 ruling, declared that Trump had gone beyond the powers granted to him under existing US law. The decision noted that while presidents do have considerable leeway in responding to national emergencies, that authority does not extend to imposing tariffs or taxes on imports without congressional approval.
The ruling directly targets tariffs Trump enacted on April 2, a day he labeled “liberation day.” His measures set a 10% baseline tariff on nearly all US trading partners, while levying steeper, so-called “reciprocal” tariffs on nations he accused of unfair trade practices. Some cases drew attention for their unusual scope, including a 50% tariff on Lesotho, a small nation in southern Africa, and a 10% tariff on uninhabited islands populated only by penguins.
Judges said Trump’s actions were “unbounded in scope, amount, and duration” and asserted an authority that went beyond the law his administration invoked. Trump had relied on the International Emergency Economic Powers Act (IEEPA), which allows presidents to regulate international transactions during a declared national emergency. However, the court found the statute did not give him unlimited authority to impose tariffs, noting that Congress has historically reserved tariff power for itself.
Trump had previously used the same law to justify tariffs on Canada, Mexico, and China, claiming that immigration and drug trafficking constituted national emergencies. The appeals court, however, made clear that using the IEEPA in this way was outside its intended scope.
While the decision marks a significant defeat, the tariffs are not gone yet. The ruling will not take effect until October 14, giving Trump’s legal team time to appeal to the Supreme Court. The high court, which leans conservative, will likely have the final say on whether the former president’s actions were lawful.
If the Supreme Court upholds the appeals court decision, the financial consequences could be considerable. Revenue from tariffs reached $159 billion by July, more than double the amount collected the previous year. The Justice Department has warned that striking down the tariffs might require the government to refund a significant portion of that revenue, posing a potential financial shock to the US treasury.
The ruling also casts doubt on Trump’s ability to impose new tariffs quickly. While alternative statutes, such as the Trade Act of 1974, do allow for tariffs in cases of trade imbalances, they come with stricter limits—capping tariffs at 15% and restricting their duration to 150 days.
For Trump, the decision also represents a political setback. His tariffs have been central to his economic message, marketed as a way to protect American workers and industry. But economists argue that the costs have largely been borne by consumers and businesses, fueling inflation and uncertainty in global markets.
Trump reacted angrily to the ruling, spending much of Friday reposting online criticism of the judges. On his own platform, he called the appeals court “highly partisan” and warned that if the tariffs were struck down, it would be a “total disaster” for the country.
“Tariffs are the best tool to help our workers,” he wrote, insisting that the measures had strengthened the US economy despite evidence of rising costs for households. He added that if the decision stands, it would “literally destroy the United States of America.”
The legal battle now heads toward what could be a defining moment at the Supreme Court, where the balance between presidential authority and congressional power over trade will be tested.
